Chinese Native Luckin Coffee Surpasses Starbucks in Performance... Continues Low-Price Strategy

Surpassing Q2 Sales for the First Time
Market Share Expansion Strategy with 9.9 Yuan Beverage Promotion

China's native coffee chain Luckin Coffee surpassed Starbucks' sales in the local market for the first time in the second quarter of this year. The company plans to maintain price competitiveness through a low-price strategy and expand its business going forward.

According to local media including China's Pengpai Newspaper on the 2nd, Luckin's sales in China for the second quarter of this year totaled 6.201 billion yuan (approximately 1.1171 trillion KRW), an 88% surge compared to the previous year. Net profit reached 999 million yuan, turning profitable from a net loss of 115 million yuan in the same period last year. According to US Generally Accepted Accounting Principles (GAAP), operating profit was 1.173 billion yuan, and the operating profit margin reached 18.9%, marking an all-time high.

Starbucks announced that its sales in the Chinese market for the second quarter were 822 million USD (approximately 5.94 billion yuan), a 51% increase year-on-year. This is the first time Luckin has caught up with Starbucks in quarterly sales.

As of the end of the second quarter, Luckin had 10,836 stores, becoming the first coffee chain in China to surpass 10,000 stores. The store count increased by 15.9% compared to the previous quarter. Starbucks has 6,480 stores, significantly fewer than Luckin.

Luckin is also accelerating its overseas expansion. In the second quarter, it added five stores in Singapore, securing a total of seven locations. Guo Jin, Luckin's chairman and CEO, stated in a conference call that the company will continue to explore overseas markets.

The sales improvement is attributed to the relative appeal of low-priced coffee amid recent sluggish consumption. Luckin launched a 9.9 yuan beverage promotion in June. Chairman Guo Jin explained that the 9.9 yuan promotion will continue for at least two years to expand market share.

On the other hand, Starbucks China plans to maintain its premium strategy. Wang Jingying, president of Starbucks China, emphasized, "Competitors' low-price promotions have not significantly affected Starbucks' quarterly performance," and added, "We will double investments in product innovation, store experience, and employee digitalization."

This content was produced with the assistance of AI translation services.